THE BLOG
10/29/2013 04:19 pm ET | Updated Dec 29, 2013

Allstate Insurance: Good Hands, Maybe, But Don't Bet Your Education On It

I've been watching college football for years and it suddenly dawned on me that for many of those years I've been watching field goals and PATs fly between or wide left or right of the uprights and into the "good hands people" net of Allstate Insurance. When that happens, the sportscasters invariably say something about Allstate contributing about $3 million towards scholarships since 2005. Even Allstate's own website boasts: "Allstate has been involved with college football since 2005, when Allstate's "Good Hands®" Field Goal Net program debuted at colleges and universities across the country. Each field goal and extra point kicked into the Allstate nets has helped raise over $3 million in donations for collegiate general scholarship funds. Allstate is also a proud sponsor of the Southeastern Conference and the Big Ten Conference -- two of the premier power football conferences in the country." One doesn't know how much money Allstate has raised for Allstate in that same period of time, but we'll get an idea soon enough.

So, let me get that straight. For eight years, since 2005, Allstate has contributed $3million dollars to scholarships across the United States. Apparently, that figure is supposed to make me "ooh and/or ahh" about Allstate's largesse. Well, it doesn't. As a matter of fact, that amount is shameful. That enormous amount of scholarship money comes to about $375,000 per year over eight years. According to CollegeData: "In its most recent survey of college pricing, the College Board reports that a 'moderate' college budget for an in-state public college for the 2012-2013 academic year averaged $22,261. A moderate budget at a private college averaged $43,289." According to The Huffington Post, "Earlier this year, the Associated Press reported the average tuition at four-year public universities had increased by 15 percent between 2008 and 2010. Private universities were also found to have had significant price increases." So, as college costs have risen exponentially (according to Bloomberg, college tuition and fees have increased 1,120 percent since records began in 1978), Allstate has essentially stagnated in its college contributions.

Regardless, let's do the math anyway. Even at the "moderate" level of $22,261 per year, that would come to about $90,000 for four years at an in-state institution and around $173,000 at a private institution for the same amount of time. So, what, in real dollars, is Allstate contributing at a "staggering" $375,000 per year over eight years? Even if Allstate were contributing $10,000 in scholarship aid per student, that would only amount to 37 scholarships a year, so why should I be so excited about their contributions -- especially when one considers just how much Allstate earns in a year? And how much does Allstate earn?

In a press release titled "Allstate Reports Strong 2012 Earnings and Increases Cash Returns to Shareholders According" in the Wall Street Journal dated February 6, 2013 one reads: "Net income for [Allstate] in 2012 was $2.31 billion, or $4.68 per diluted share, compared to $787 million, or $1.50 per diluted share in 2011." Allstate's net income for 2012 was $2.31 billion and they gave away a handsome $375,000 in scholarships. If my math is correct, the amount of money Allstate gave in scholarships based on their net income comes to a staggering 0.00016304347 percent! That's right, 0.00016 percent of their net income has gone for scholarship aid to students. The question one has to ask at that point is: Is one supposed to get excited over that kind of presumed largesse? It even poses the bigger question: Am I really in such good hands with Allstate to begin with? Just how many students are being advantaged by that rather paltry amount of money? As college costs rise about 5.7 percent each year, Allstate seems to be fine with their $3M donation to scholarships even though between 2011-2012 alone their net income rose substantially every year.

In a way, their apparent largesse is really disingenuous. It's bad enough that one has to watch each and every PAT and field goal be metaphorically collected by the "good hands of Allstate," but for Allstate to pretend they are really contributing to the needs of university students seems a bit fraudulent. Unfortunately, there are no penalties for that sort of "off sides."

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